Hurting the Pakistani economy

R Vaidyanathan, a professor of finance at the Indian Institute of Management – Bangalore, suggests twelve steps to shock and awe the Pakistani economy. Many of them are, in and of themselves, powerful instruments to destabilise Pakistan. Many of them can make credible threats, because carrying them out will hurt India, albeit to a much lesser extent that they hurt Pakistan.

The problem, though, is that Prof Vaidyanathan’s arguments are premised on a stable Pakistan not being in “the interest of world peace, leave alone India” and that if “Pakistan is dismantled and the idea of Pakistan is gone, many of our domestic (religious) issues will also be sorted out.”

The counter-argument is that it is an unstable Pakistan—unstable since 1947—that is the cause of much of India’s, and the world’s security problems. It is the lack of an internal reconciliation, a sense of purpose beyond being India’s doppelganger and a lack of stability that lies at the root of its ending up as an “international migraine”. Plus, unless it is possible to be very sure that the post-Pakistan set-up will somehow be more stable, and less jihadi export-oriented, dismantling Pakistan cannot be in India’s interests. [See this article]

So while attempting to bring about a collapse of Pakistan is undesirable, many of Prof Vaidyanathan’s prescriptions lend themselves for coercive diplomacy. They allow India to pursue a variety of punitive and coercive policies in a calibrated manner, without raising military tensions. For instance, it would be untenable for the international community to disagree that all economic aid to Pakistan must be made contingent on its government meeting concrete deliverables, like extraditing terrorists that live in the open in its territory. In fact, The Acorn has long argued that the greatest failure of the “peace process” was that it distracted attention from the important objective of creating a range of flexible policy instruments that could not only be turned on and off, but also fine-tuned and targeted.

To modify B Raman’s words a little, the capability to cause “a divided Pakistan, a bleeding Pakistan, a Pakistan ever on the verge of collapse without actually collapsing—-that should be our objective till it stops using terrorism against India.”